Sebi bars Anil Ambani for 5 years, slaps Rs 25 crore fine over fraudulent scheme

The Securities and Exchange Board of India (Sebi) has imposed a sweeping five-year trading ban on industrialist Anil Ambani and 24 other entities, including former top officials of Reliance Home Finance Ltd (RHFL). The move follows revelations of a major fraudulent scheme designed to divert funds from RHFL.

In a comprehensive 222-page final order, Sebi detailed how Ambani and RHFL executives orchestrated a scheme to channel funds from RHFL to entities linked to him under the pretense of loans. The regulator has also slapped a Rs 25 crore fine on Ambani, prohibiting him from any involvement with the securities market, including serving as a director or Key Managerial Personnel (KMP) in any listed company or intermediary registered with Sebi.

Sebi's investigation uncovered that despite directives from the RHFL Board to cease such lending practices, the company's management continued to approve loans to companies with minimal assets or cash flow. This misuse of funds led to a significant financial collapse, with RHFL’s share price plummeting from Rs 59.60 in March 2018 to just Rs 0.75 by March 2020.

The regulator has also barred RHFL from the securities market for six months and imposed a Rs 6 lakh fine. Additionally, penalties were imposed on 24 other restrained entities and individuals involved in the fraudulent activity. Notable fines include Rs 27 crore for Amit Bapna, Rs 26 crore for Ravindra Sudhalkar, and Rs 21 crore for Pinkesh R Shah.